New Gov’t Regs?  The Empire Strikes Back!

Been a while since my last post – apologies to my regular readers – I’ve been tied up helping a pharmaceutical manufacturer that’s undergone stratospheric growth since FDA approval of a couple of their formulations – they’ve outgrown ERP, there’s visibility problems in the supply chain – nothing that we can’t solve, it’s just time consuming and all hands on deck – so a lack of blogging time.

Anyway – today’s topic – I’ve been involved with FDA regulated industries since the 1980’s. Pharma, BioPharm, Nutraceuticals, and the last few years, helping Food Manufacturers get ready for the Food Safety and Modernization Act (FSMA).  Frustrating thing that FSMA – it was signed by President Obama in 2011, and the law stated that regulations would be forthcoming by 2012 – which was delayed til ’13, then ’14 – now we’re told to expect final regulatory issuance in ’15 but most pundits expect it won’t happen til 2016.  Kinda makes it hard for Food Manufacturers to move forward on decisions when they don’t know what the FDA will be demanding next.

I’d written some recent posts about how similar FSMA was to Obamacare. With so many companies shifting to part-time employees to avoid expected cost increases in mandated health insurance, the only known aspect seemed to be uncertainty – and of course the latest delay in the employer mandate has granted another free year of unlimited uncertainty to lucky businesses all across the country.

So I’m working with my Pharma client last week – one of the things Pharmaceutical Manufacturers are dealing with is called Serialization – stemming from a new law, The Drug Quality and Security Act – passed in November 2013.  Of particular interest is a section of that law called the Drug Supply Chain Security Act (DSCSA).

Remember all those spam offers you’ve received to purchase cheap prescription meds from shady internet dealers?  Well, it turns out many of those sources were actually using counterfeit drugs, knock-offs and often sugar pills manufactured to look like the actual drug, but without the active ingredients. Who knew?  I guess that’s how they could sell V*IA*GR*A so cheaply.

In an effort to crack down – and hopefully stop some of the spam (wait that’s an overreach) but to crack down on counterfeit meds, drug manufacturers will start putting serial numbers on actual shipments, along with tracking paperwork, and a history of which distributors, shipping companies and pharmacies have stocked or handled a particular shipment of pharmaceuticals. So now, you can see the entire history of a drug, all the way back to the manufacturer – certified, inspected and approved.

Good stuff – even if it doesn’t completely stop the spam.

January of 2015, Manufacturers are supposed to implement portions of the required labeling, tracking and paperwork. One problem – FDA regulatory guidance – the actual rules everyone is supposed to follow have been….wait for it….you know it’s coming….DELAYED.

Good news though. They’re scheduled to be released in November. That’s right, November 2014. So an agency, the FDA, which requires 6 months to a year to approve any tiny change in manufacturing process, will release guidance 30-45 days before the changes have to be put into practice by manufacturers.

I can see I won’t have much time for blog posts during the ‘holiday’ season.

Or, go figure, will we see another ‘delay’ of the same type we’ve experienced with Obamacare, The Food Safety And Modernization Act – even the DSCSA itself has already calendared a few ‘delays’.

So really, what are pharmaceutical manufacturers supposed to do? The number one choice when facing uncertainty is to put off decisions until more information is available. Sounds prudent, safe and no one ever made a bad decision if they never made a decision at all.

It’s Time for the Empire Strikes Back…..

Without resorting to Yoda type syntax, I’m going to advise the opposite. Don’t wait, move ahead full steam – not to act is to decide to not act…(oops Yoda-ism snuck in there)

– or as Obi Wan Kanobi said, “Use the Force, Luke, the Force of Technology.” (I’m paraphrasing here)

Let’s face it, we’re in a period where uncertainty rules. The source is a Washington regime who can act politically, yet tends to fail administratively.  They can pass laws, they just can’t implement them. Or so recent history would lead us to believe. And how long is this going to last? Well, that’s the ‘uncertain’ part of ‘uncertainty’, now isn’t it? What is certain is the existing uncertainty is likely to remain in play for the foreseeable future.

So am I suggesting you just throw money at a problem you can’t define with a solution you don’t know is right – not by a long shot.

But I am suggesting you move forward.

For example, we know in the pharma industry that serialization means we’re going to have to barcode our outgoing product and provide manufacturing details  – don’t know what those details are, and how we’ll be delivering that data – but we can upgrade our internal barcode technology and hand held scanners today to help speed the process of gathering data, tracing lot details, ingredients, and making our shop floor transactions faster and more accurate.

Then, when the final DSCSA regs are published, whether it’s November 2014 or becomes delayed til 2017, we’re simply adding a functionality onto an existing technology.  Might take some integration, may involve some development – as long as we’ve gone with a solid technology from a reliable vendor, it’s a high probability we’re going to have a quick solution.

But what if we don’t?  We still win.

It could be so expensive to retrofit that we might scrap everything we have and start over – BUT – in the meantime, we’re 1) Way ahead of our competitors in scanning and barcoding technology and staff expertise 2) We’re going to be better at rolling out generation two, from the lessons we learned in version one. 3) We’ve been making more money by cutting our labor spend and keeping our inventory more accurate for the last six, 12 or 18 months.

That’s 5 potentially positive outcomes for us, and chances are, our competition is standing pat, doing nothing, paralyzed by uncertainty.

Note that this assumes a ‘we’ type arrangement. In that you are working with a solid Enterprise Software Consultant who’s going to help you assess which technologies are going to pay off, keep you away from shady, second-rate vendors with lousy technology and long implementation times.

It’s the same in the Food Manufacturing.  You know FSMA regs are coming – but you can deal with the known Global Food Safety Initiatives today – which will likely be close to what FDA inspectors examine.

Software improvements in Quality Management Systems, technology advances in shop floor manufacturing automation, Cloud applications for supply chain efficiencies – all can give you greater efficiencies today, with stronger responses tomorrow.

And I really believe, in this uncertain period, if you take the right actions, there’s several good outcomes, and done right, very little downside.

Now about that Obamacare…I’m afraid there’s no technology solution for that except to just get as efficient as you can and make as much money as quickly as you can so you’ll have a pile of dough stored up when it does implement…so give me a call and we’ll both be ready when it hits!

For technology advice, light saber lessons, and a better understanding of The Force, you can reach gh@genehammons.com